Income Tax Appellate Tribunal - Jaipur
Acit, Jaipur vs Vartika Girdhani, Jaipur on 10 November, 2016
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 807/JP/2013
fu/kZkj.k o"kZ@Assessment Year : 2010-11.
The Asstt. Commissioner of Income Tax, circle-5,
Jaipur.
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Vs.
Smt. Vartika Girdhani,
717, Ashok Chowk, Adarsh Nagar,
Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AEHPG 6521 M
vihykFkhZ@Appellant
izR;FkhZ@Respondent
jktLo dh vksj ls@ Revenue by : Shri Prithvi Raj Meena (Addl.CIT)
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Madhukar Garg (C.A.)
lquokbZ dh rkjh[k@ Date of Hearing : 07.11.2016.
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/11/2016.
vkns'k@ ORDER
PER SHRI KUL BHARAT, JM.
This appeal by the Revenue is directed against the order of ld. CIT(Appeals)-II, Jaipur dated 29.08.2013 pertaining to A.Y. 2010-11. The revenue has raised the following grounds of appeal :-
" On the facts and in the circumstances of the case and in law the ld. CIT (Appeals) has erred in :-
Deleting the addition of R. 39,08,159/- made u/s 43B on account of unpaid service tax.
(ii)(a) Deleting addition of Rs. 11,31,472/- (wrongly mentioned as Rs. 9,17,841/-) made for depositing the employee's contribution to PF & ESI beyond the prescribed time limit provided in the respective Acts.
(b) Holding that employee's contribution to PF & ESI are governed by the provision of section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of I.T. Act.
2. Briefly stated the facts of the case are that the case of the assessee was picked up for scrutiny assessment and assessment under section 143(3) of the I.T. Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 23.04.2012. While framing the assessment, the AO rejected the books of accounts and applied net profit rate at 4.89% on the total turnover of R. 5,12,09,131/- and thereby made trading addition of Rs. 3,82,694/-. The AO further made an addition of Rs. 39,08,159/- by invoking provisions of section 43B of the Act for non-payment of service tax. The AO further made disallowance in respect of employees contribution of PF and ESI amounting to Rs. 9,17,841/- and Rs. 2,13,631/- respectively. Aggrieved by this order, the assessee preferred appeal before ld. CIT (A), who after considering the submissions and following the case laws as relied upon by the assessee, deleted the addition and disallowance and partly allowed the appeal of the assessee.
3. Now the revenue is in appeal before us.
4. First ground of the revenue is against deletion of addition of Rs. 39,08,159/-.
4.1. The ld. D/R supported the order of the AO and submitted that ld. CIT (A) was not justified in deleting the addition. He submitted that the assessee has failed to deposit the amount within the specified date.
4.2. On the contrary, ld. Counsel for the assessee supported the order of the ld. CIT (A) and reiterated the submissions as made in the written brief. He submitted that the issue is no more res integra, has been decided in favour of the assessee by various judicial pronouncements. The ld. Counsel submitted that the AO has failed to follow the binding precedents on the basis of whims and fences.
4.3. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) has decided this issue in para 3.3 of his order which reads as under :-
"3.3. I have considered the facts of the case; assessment order and appellant's written submission. Assessing Officer disallowed service tax liability not paid till the due date of filing return under section 43B. Appellant submitted that assessing Officer rejected the book results under section 145(3) and estimated net profit which has been accepted by the appellant. In view of this, what is assessed is the estimated net profit without considering the book results and all the expenses are deemed to have been allowed/disallowed in working out such estimated net profit. Appellant relied upon several judicial decisions in which it is held that once book results are rejected and profit is estimated, no further disallowance can be made. Appellant also referred section 29 of IT Act in which deductions from section 29 to section 43D are allowed. When net profit is estimated all the deductions from section 29 to section 43D are deemed to have been allowed and no further disallowance under any provision from section 29 to section 43D is to be made. In these decisions, the disallowance under section 40A(3) and 40(a)(ia) made by AO after estimating the profit subsequent to rejection book results was not upheld. The disallowance made by the Assessing Officer under section 43B is similar to disallowance under section 40(a)(ia) as in both the provisions expense is to be allowed on actual payment/payment of TDS. If any disallowance is made, the same can be allowable in the year of payment or payment of TDS. High Courts and tribunals have held that no disallowance can be made subsequent to the rejection book result and estimation of net profit. Therefore making addition under section 43B in the case of appellant is against the decisions referred in appellant's submission. Respectfully following these decisions including the decisions of jurisdictional High Court and tribunal which are binding on CIT (A), the disallowance of service tax made by the assessing officer is deleted.
It is however clarified here that service t4ax relating to this year, which is deemed to have been allowed after income is estimated subsequent to rejection book result, will not be allowable in any subsequent year on the basis of payment. Therefore assessing officer will not allow any claim of payment of service tax relating to this assessment year in any subsequent year."
We also find that the issue is squarely covered by the decisions of the Coordinate Bench rendered in the cases of Ashok Parnami vs. Additional CIT in ITA No. 777/JP/2013 dated 29.01.2016 and M/s. Cosmopolitan Trading Corporation vs. ITO in ITA No. 298/JP/2013 dated 17.07.2015. Therefore, respectfully following the order of coordinate Bench in ITA No. 777/JP/2013 dated 29.01.2016 for A.Y. 2009-10 and in ITA No. 298/JP/2013 dated 17.07.2015 for A.Y. 2005-06, we affirm the order of ld. CIT (A) and the ground of the revenue is hereby rejected.
5. Ground no. (ii)(a) & (b) relates to deletion of addition of Rs. 11,31,472/- on account of late deposit of employees' contribution to PF and ESI.
5.1. On perusal of the books of accounts, the AO noticed that the assessee has deposited the employees' contribution to PF and ESI beyond the prescribed time limits, which is not in accordance with law. On being asked to explain the late deposit of the contribution, the assessee explained that these sums have been paid before due date of filing of return of income and hence allowable as deduction. The AO could not find the explanation acceptable and thus disallowed Rs. 11,31,472/- and added to the total income of the assessee. Being aggrieved, the assessee preferred appeal before ld. CIT (A), who allowed the a claim of the assessee by following the judgment of the Hon'ble Jurisdictional High Court rendered in the case of Jaipur Vidhyut Vithran Nigam Ltd., 265 CTR 62 (Raj.) and CIT vs. State Bank of Bikaner & Jaipur (2014) 99 DTR 131 (Raj.) and other case laws on the issue.
6. Now the revenue is in appeal before us.
6.1. The ld. D/R supported the order of AO and requested to set aside the order of ld. CIT (A) and restore the order of AO.
6.2. On the other hand, the ld. A/R supported the order of the ld. CIT (A) and reiterated the submissions as are made in the written submission.
6.3. We have heard the rival contentions and perused the material available on record. We find that the coordinate Bench of the Tribunal in ITA No. 166/JP/2012 by following the judgment of the Hon'ble Supreme Court in the case of CIT vs. Vinay Cement, 213 CTR 268 (SC) has decided the issue in favour of the assessee. The Hon'ble Jurisdictional High Court has also decided this issue in favour of the assessee in the cases of Jaipur Vidhyut Vithran Nigam Ltd., 265 CTR 62 (Raj.) and CIT vs. State Bank of Bikaner and Jaipur (2014) 99 DTR 131 (Raj.). In the light of above facts, we do not find any reason to interfere with the order of ld. CIT (A), which is hereby affirmed. The ground of the revenue is rejected.
7. In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on 10/11/2016.
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(VIKRAM SINGH YADAV) ( KUL BHARAT )
ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Jaipur
Dated:- 10/11/2016.
Das/
vkns'k dh izfrfyfi vxzsf"kr@Copy of the order forwarded to:
1. The Appellant- The ACIT, Circle-5, Jaipur.
2. The Respondent- Smt. Vartika Girdhani, Jaipur.
3. The CIT(A).
4. The CIT,
5. The DR, ITAT, Jaipur
6. Guard File (ITA No. 807/JP/2013)
vkns'kkuqlkj@ By order,
lgk;d iathdkj@ Assistant. Registrar
6
ITA No. 807/JP/2013
Smt. Vartika Girdhani.